ASX-listed Calidus Resources has taken two crucial steps in its journey towards becoming Australia’s next gold producer completing installation of the mill at its Warrawoona project in WAs Pilbara region and signing a mining services agreement with Macmahon Holdings. Construction is now more than 60 per cent complete with the company on track to pour first gold in the June quarter next year.
Calidus also reported the concrete works are almost finished and the mill shell instillation has been finalised laying solid foundations for the company to reach its highly anticipated first gold pour by June quarter next year.
Despite industry wide labour shortages and delays in supplies, the company reported work at Warrawoona is proceeding at pace on all work fronts.
Adding to the momentum, Calidus said it has signed a mining services agreement with Macmahon Holdings which covers all open pit mining until 2026.
Calidus Resources Managing Director, David Reeves said:“Every element of our exploration development and production strategy is proceeding to plan. In addition, we are very pleased to have signed the mining services agreement with Macmahon, which will mobilise in the new year to ensure we have sufficient ore stocks available at mill commissioning.”
The company’s projections for Warrawoona include “stage one” gold production averaging 90,000 ounces per annum over an initial mine life of eight years and all-in sustaining costs averaging $1,290 an ounce across the life of mine.
EBITDA is forecast to average $92 million a year based on a gold price of $2,355 an ounce and the post-tax capital payback to be achieved at an impressive 15 months.
Calidus also has 125,000 ounces of production hedged at $2,355 an ounce as part of its Macquarie debt agreement.
Warrawoona’s main Klondyke deposit hosts proved and probable open-pit and underground reserves of 14 million tonnes of ore grading an average 1.2 grams per tonne for 521,000 ounces of contained gold.
Further resource development is progressing at a steady clip with the company – and investors - eagerly awaiting assay results from recent diamond drilling at its Blue Spec project located 75 kilometres from Warrawoona. Visible gold was reported in drill core from the deposit which could replicate bonanza historical grades such as 7 metres at 24.6 grams per tonne gold and 0.5m at an eye-watering 245 g/t gold.
Blue Spec already boasts an inferred and indicated mineral resource calculated by previous owners that weighs in at 415,000 tonnes averaging a blockbuster grade of 16.35 g/t for 219,000 ounces of contained gold. Results from the recent drilling will feed into a definitive feasibility study resource update expected in the coming months.
Calidus sees Blue Spec’s ore contribution propelling production at the Warrawoona project to nearly 140,000 ounces per annum for three years – from year four to six - across an initial mine life of eight years.
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By Matt Birney
